Optimizing transparency and efficiency in the global supply chain

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The Challenge

While the sourcing of DSM’s marine contracts was conducted with carriers globally, business groups handled their transport management, documentation and order booking in their own way.

Information from carriers and forwarders was contained within many systems and therefore could not be easily accessed. Reports were structured differently, which also meant carrier performance could not be directly compared. Dealing with multiple forwarders and a large number of carriers resulted in the need for standardization and transparency.

“We knew there was a big potential in optimizing our transparency, efficiency and by being recognized as one company by the carriers,” said Linda Rutten, Category Manager Physical Distribution for DSM Sourcing.

The Solution

Therefore DSM decided to implement global sea freight standards. Rutten worked with logistics staff of DSM’s individual business groups through a company-wide sourcing project to develop the necessary standards. The primary goals of the initiative were transparency, optimization of process and supplier quality, and greater cost efficiencies. To help meet those goals, potential supplier resources were invited to participate in a RFQ process and challenged to provide detailed solutions.

PSA BDP was awarded DSM’s global transportation management business, including freight forwarding, import brokerage, documentation, invoicing, and some ocean transportation.

Bart Oosterlee, Global Logistics Manager for the company’s Powder Coating Resins, represents one of the business units participating in the sourcing project. “Regardless of the global nature of business, every implementation is a local implementation. We wanted someone who could match our own global footprint and overlap the production sites we have around the world,” Oosterlee said. “We have a strong presence in Europe, US and Asia, and ship to customers globally where local BDP offices take care of on-carriage in countries like Brazil, India or Turkey.

“We wanted to work with one of the best companies in the marketand a partner that has freight forwarding as its core activity—not a ship department of a large freight operator,” Oosterlee added. “Four of our five global sites are handled through [PSA BDP] and we are in the process of completing the fifth site soon.”

Seeing everything at once PSA BDP’s Hoogvliet office in the Netherlands was selected as the global control tower office for the DSM account. “Our objective was to improve DSM’s global shipment visibility and process optimization across all continents,” said Luc Wellens, Vice President, EMEA & India, Global Chemical Sales for PSA BDP. “The biggest challenge was to set up the EDI connectivity required, which provided instant global connectivity between our companies.”

PSA BDP’s technology and metrics reporting played important roles for DSM. Describing Smart Suite, the company’s customer service portal, Rutten said, “It is very high added value. There is so much information available and easily accessible. [The] systems are connected to the various sea carriers. Now we have an overall view of everything—we can track the entire shipment, see volumes, and how multiple carriers are performing.”

“We mapped out all processes and standard operating procedures, resulting in efficiency improvements of DSM’s global supply chain,” Wellens added. “Our two organizations continue to challenge and improve upon the ‘as-is’ processes, which makes this a strong relationship.”

Better solutions for less costs

DSM also was pleased with cash savings, which Oosterlee credits to PSA BDP’s business solutions and better access to local markets. “For example, improved planning enabled the business unit to use a lower cost barge solution more frequently than before. The savings actually were quite a lot when you look at each individual shipment. Plus, [the] team ensures all contracts are squeezed to the last penny.”

To Rutten, “[PSA BDP] checks the invoices from carriers. Another aspect we have experienced with [PSA BDP,] is the reduction in transport management costs compared to our previous agreements with multiple forwarders. They manage demurrage and detention of the container base very well due to their visibility of the whole supply chain.”

DSM contracted with PSA BDP just as the economic downturn began. “Delivery reliability, planning and service became even more important. Our customers were short on stock, so that had to be managed better. [PSA BDP] helped us by creating overviews on carriers’ lead times and proposed better solutions,” Rutten said.